We have isolated and characterized the complete primary structure of a new member of the tissue inhibitor of metalloproteinase family (TIMP family) which we refer to as TIMP-2. Our studies have shown that TIMP-2 transcription is regulated independently of both TIMP-1 and TIMP-3. We have also demonstrated that TIMP-2 is anti-angiogenic. The mechanism for this effect is two fold; through inhibition of endothelial cell proliferation and blocking endothelial cell-mediated matrix proteolysis. TIMP-2 inhibits tumor cell invasion through reconstituted basement membranes in vitro, and this inhibitor demonstrates erythroid potentiating activity (EPA). TIMP-2 inhibits proteolytic opening of the blood brain barrier in hemorrhagic stroke models. In addition to their function as MMP inhibitors, a growing body of experimental evidence suggests that TIMPs behave as cytokines and stimulate cellular proliferation in the absence of other growth factors. In the presence of growth factors, however, TIMP-2 antagonizes the growth of cells. In order to understand the disparate effects of TIMP-2 on growth, the signal transduction mechanisms utilized by TIMP-2 was evaluated. The growth promoting effects are presumably mediated by putative TIMP receptors. Recent studies have demonstrated selective cell surface binding of TIMP-2 to HT-1080 cells that is not competed by TIMP-1. In the absence of serum or exogenous growth factors, rTIMP-2 mediates a mitogenic response in normal dermal fibroblasts and fibrosarcoma cells by stimulating adenylate cyclase to produce cAMP which, in turn, activates cAMP-dependent protein kinase (PKA). The increase in cAMP which may involve activation of a G- protein is required for proliferation. This is the first demonstration that TIMP-2 stimulates growth by activation of PKA. TIMP-2 peptides are currently being employed to map the precise location of this effect.